MGM Resorts International (MGM)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,760,310 | 2,765,120 | 2,307,380 | -547,916 | 3,529,420 |
| Long-term debt | US$ in thousands | 6,343,810 | 7,432,820 | 11,770,800 | 12,376,700 | 11,168,900 |
| Total stockholders’ equity | US$ in thousands | 3,811,170 | 4,831,530 | 6,070,640 | 6,504,730 | 7,727,260 |
| Return on total capital | 17.33% | 22.55% | 12.93% | -2.90% | 18.68% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,760,310K ÷ ($6,343,810K + $3,811,170K)
= 17.33%
MGM Resorts International's return on total capital has shown variability over the past five years. In 2023, the return on total capital stood at a positive 14.96%, indicating that the company generated a return of 14.96% on its total invested capital during that year. This is a significant improvement compared to the negative returns observed in 2022 and 2020, which were -13.77% and -10.76%, respectively.
The return on total capital for 2021 was 3.43%, reflecting a moderate increase from the previous year. In 2019, the company achieved a return of 8.13% on its total capital, demonstrating a solid performance.
Overall, the positive return on total capital in 2023 suggests that MGM Resorts International was able to effectively generate profits relative to the total capital invested in the business. However, the fluctuating trend in return on total capital over the past five years indicates a degree of inconsistency in the company's ability to generate returns on its invested capital. Further analysis of the underlying factors contributing to these fluctuations would provide deeper insights into the company's financial performance and capital efficiency.
Peer comparison
Dec 31, 2023